AGL Energy has announced the launch of what will be the world’s largest virtual power plant (VPP), using 1,000 connected batteries installed in homes and businesses in South Australia to manage usage and reduce price spikes.
The VPP works by using a cloud-connected intelligent control system that allows the batteries to be directed in unison.
This will allow consumers to self-consume their stored solar power during peak demand periods, benefiting both them and the broader community to manage peaks in electricity demand.
The VPP will provide participating homes and businesses five MW of peaking capacity.
Partnering with AGL is the Federal Government via its renewables funding agency, The Australian Renewable Energy Agency (ARENA), and leading United States-based energy storage and management company, Sunverge.
“This project is the world’s largest, the first of its kind and an innovative solution to both help customers manage their energy bills and at the same time contribute to grid stability,” AGL Managing Director and CEO, Andy Vesey said.
“It offers consumers the opportunity to be part of the world’s largest virtual power plant, giving them greater ability to consume more of the energy generated from their own rooftop solar systems, lowering power bills, reducing emissions and purchasing a battery at a significant discount.
“The virtual power plant will be capable of storing seven MWh of energy, with an output equivalent to a five MW solar peaking plant.
“We believe it will demonstrate alternative ways to manage peaks in energy demand, contributing to grid stability and supporting the higher penetration of intermittent, renewable generation on the grid,” Mr Vesey said.
The project will cost approximately $20 million, with ARENA providing conditional approval of $5 million.
“This project is core to AGL’s strategy of being a manager of distributed energy resources,” Mr Vesey said.
“It also leverages our investment in Sunverge and helps us to continue to improve the digital customer experience.”
South Australian Treasurer and Energy Minister Tom Koutsantonis said, “The State Government congratulates AGL for looking at innovative ways to use batteries to increase the penetration of renewables.
“We encourage others in the private sector to also consider how dispatchable renewable energy technology can be used to deliver electricity around-the-clock.”
ARENA CEO Ivor Frischknecht said the project could point to solutions to South Australia’s grid challenges and reduce the risk of power price shocks in the state.
“Australia is on the cusp of a battery storage revolution as technology costs continue to fall,” Mr Frischknecht said.
“ARENA is at the forefront of figuring out how batteries can best support renewable energy to provide affordable, reliable and sustainable power.
“ARENA expects virtual power plants to play a significant role in the future as more renewable energy is connected to our power networks.
“The approach can ease local network constraints in South Australia, displace gas power and complement the Victorian interconnector, especially during times of peak demand.”
The project will be rolled out in three phases over about 18 months.
Customers participating in the project will be able to purchase a heavily discounted 5kW/7.7 kWh energy storage system including hardware, software and installation.
In the first phase, running until April 2017, the first 150 customers based in metropolitan Adelaide will be able to purchase a Sunverge 5kW/7.7kWh energy storage system.
Later phases will see an offering to narrower zones within metropolitan Adelaide where peak demand management and other network support services can be demonstrated.
AGL also hopes the project can demonstrate how relationships between electricity networks, retailers, consumers and the market operator can create new sources of value and stability in a renewable energy future.